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Foreign Direct Investment and the Supply of Life Insurance in Emerging Countries

While the relation between foreign direct investment (FDI) and financial development is an important topic that has been examined in prior literature, we provide the first analysis of a direct relation for the insurance sector. We construct panel data on foreign direct investment and the level of life insurance in 29 emerging economies to test whether FDI coincides with increases in life insurance expenditure. For the sample period, our results suggest that countries with higher FDI tend to have higher life insurance penetration. While the result is mitigated by the role of financial development and country-specific variables, the relation persists across various robustness tests. 

Author - James M. Carson, Pei-Han Chen and J. François Outreville
Journal - Journal of Insurance

Source - https://www.jstor.org/stable/27000407